Previous Budget Speeches









I rise to present the Budget of the Government of Andhra Pradesh for the year 1998-99.

2. Budget formulation is a daunting task as Finance Ministers are called upon to apportion scarce resources among intensely competing demands. Honourable members are aware that a variety of inputs - political, economic and fiscal - go into the budget exercise. This time around an additional - and valuable - input has been the verdict of the people in the recently concluded elections to the Lok Sabha. As political parties, we will all make our own assessment of our successes and reverses. A budget speech is not an occasion for political analysis and I do not intend to say anything on that. What I do intend to say, however, is that our Government has done an objective analysis of the electoral verdict with a view to identifying both the strengths and weaknesses in our performance. We intend to correct for our weaknesses and reinforce our areas of strength, both in terms of designing policies and their delivery systems. The single and unwavering goal of every policy and action of our Government is to make Andhra Pradesh the number one state in the country in terms of growth, equity and quality of life. This budget, I submit, reflects that commitment - a commitment that Honourable members will have several occasions to test in the course of this session. We will deeply value your advice, guidance, and more importantly your participation in this admittedly gigantic task of taking Andhra Pradesh to a higher growth trajectory and ensuring basic minimum needs to each and every citizen of the State.

Economic And Fiscal restructuring

3. In my last budget speech, I had occasion to share with the honourable members the agenda for fiscal adjustment embarked upon by our Government. This has essentially four elements: (i) expenditure restructuring; (ii) expenditure management; (iii) resource augmentation and (iv) growth enhancing sectoral policies. At around 18 per cent of the gross state domestic product (GSDP), public expenditure in the state is not excessive. What is, in fact, required is not a reduction in public expenditure, but a radical change in its composition aimed at tighter targetting of subsidies and reducing the share of establishment costs and interest payments in total expenditure. This will enable us to raise expenditure on maintenance of assets, in merit good sectors like education and health and in building capital assets such as roads, ports and irrigation projects. The medium term goal of fiscal adjustment is to raise the revenue to GSDP ratio by two percentage points. This two percentage gain will be used for raising expenditure by one point and reducing fiscal deficit by one point.

4. As the Finance Minister, it is a matter of satisfaction for me that our efforts at fiscal adjustment have started yielding results. We have managed to reduce the revenue deficit during the current year from 1.3 per cent of GSDP projected in the budget to 0.8 per cent of GSDP in the revised estimate. As you will see from the budget uploads presented, the revenue deficit projected for next year is not only lower in absolute terms, but even lower in proportional terms at 0.6 per cent of GSDP. We expect thereafter to attain and increase revenue surplus so as to deploy those funds for building the much needed human and physical infrastructure.

5. Even with the above success on the revenue account, admittedly modest, the ways and means management during the current year has been a formidable challenge. This has been so not because of any default on our side but because of the expected inflows from the Centre not materializing. The Union Finance Minister had promised, in his last budget speech, to devolve 77.5 per cent of the inflows under the Voluntary Disclosure of Income Scheme (VDIS) to the states. Tentative calculations indicate that the state should have got about Rs.650 crores as our share under VDIS. However, the Centre has not so far devolved our share of VDIS inflows in spite of our repeated pleas. The only sliver lining is the recent press reports that a part of the amount may be released shortly.

6. Our resource estimate has also been affected by the delay in the Centre's implementation of the alternate scheme of devolution proposed by the Tenth Finance Commission. As honourable members will recall, the Tenth Finance Commission had recommended that the present scheme of devolution - of giving the states a share in income tax and union excise duties - should be replaced by an alternate scheme involving pooling of all central taxes and giving the states 29 per cent of the total gross pool. This issue had come up in several meetings of the Inter-state council. Taking advantage of that forum, our Chief Minister presented to the Council an alternate paradigm of fiscal federalism that will enhance the fiscal autonomy of the states and enable them to design and deliver development schemes reflecting the local needs, priorities and problems. As against the 29 per cent share recommended by the Tenth Finance Commission, we argued that the states' share should be raised to 40 per cent. Without withdrawing this demand for a higher share, we agreed to go along with the consensus for a 29 per cent share to start with. We also asked that the scheme be implemented with effect from 1 April 1996, the date recommended by the Finance Commission. Even though the Centre accepted this arrangement in principle, the necessary Constitutional amendment has not been moved yet. Consequently, we did not get our estimated share of about Rs.500 crores.

7. Anticipating central inflows under VDIS and the alternate scheme of devolution, our Government had made additional commitments towards several development schemes including Janmabhoomi, repairs and improvements to hospitals and roads, industrial promotion etc. In view of these central flows not materializing, we had run into ways and means problems on several occasions. Even so, I want to assure honourable members that we have not let our development programmes suffer as will be evident from the fact that our performance under the Annual Plan will be higher than the budgetted outlay.

Review Of Economic Trends

8. As per quick estimates, the Net State Domestic Product for 1996-97 at current prices was Rs.72195 crores as against Rs.64361 crores for 1995-96 registering an increase of 12.2 per cent. At constant (1980-81) prices, this estimate of NSDP for 1996-97 translates to Rs.15587 crores as against Rs.14826 crores for 1995-96 showing a growth rate of 5.1 per cent.

9. The per capita state income at current prices, which is the most significant indicator of growth, increased from Rs.8938 in 1995-96 to Rs.9867 in 1996-97 registering an increase of 10.4 per cent. At constant (1980-81) prices, the per capita income increased from Rs.2059 in 1995-96 to Rs.2130 in 1996-97 recording an increase of 3.5 per cent. The average annual growth rate of per capita income during the period 1980-95 was 2.2 per cent. The growth rate of 3.5 per cent in per capita income attained last year is therefore decisive evidence of the economy having shifted to a higher growth trajectory.

Annual Plan

10. The Plan outlay for the current year, as approved by the Planning Commission was Rs.3585.09 crores. Keeping in view the development needs of the State, in the budget for the current year, we provided for a Plan outlay of Rs.3809.60 crores which is 6.2 per cent higher than that approved by the Planning Commission. The revised estimate is marginally higher at Rs.3860.45 crores. We are confident of achieving this level of performance notwithstanding the ways and means constraints that I referred to earlier.

11. The budgetary allocation for next year's Plan has been stepped up to Rs.4678.95 crores reflecting an increase of 22.8 per cent over the outlay for the current year. About 26 per cent of the Plan outlay is earmarked for Social Services sector. While Agriculture and Irrigation sectors account for 26 per cent of the Plan outlay, Energy and Transport sectors have been allocated 20 per cent and 10 per cent respectively. Rural and Special Area Development Programmes together will get about 14 per cent.


12. Janmabhoomi was launched in January 1997 by our Government as a people centred development process aimed at achieving an enhanced quality of life for every man, woman and child in the State. It embodies the principles of people's participation, equality, transparency and accountability and promotes excellence in all walks of life. Five rounds of Janmabhoomi have been held in the State in January, May, August, October, 1997 and January 1998. The operationalization of Janmabhoomi is centred around five core areas namely: community works, primary education, primary health and family welfare, ecological integrity and responsive governance. The Janmabhoomi programme is a reflection of our GovernmentÕs view that the process of development is as important as its substance. The Janmabhoomi programme has been acclaimed by people across the country and around the world for making peopleÕs participation in development a concrete reality. It is a matter of immense credit not only to the Government, but to all our people as well, that the programme came in for praise even from the first citizen, His Excellency the President of India, who released the Janmabhoomi Philosophy document on the State Formation Day, 1st November 1997.

13. During the Janmabhoomi rounds, teams of officials and non-officials visited all the habitations in the State and conducted Gram Sabhas. Action Taken Reports on the representations received from the people have been presented in the Gram Sabhas making the government functionaries accountable to the people. The ongoing developmental activities and functioning of government institutions were reviewed bringing in greater transparency and accountability at the cutting edge level. Another major initiative under Janmabhoomi is to nurture community level participatory structures which will be integrated with the Local Bodies at the Gram Panchayat level.

14. The achievements under Janmabhoomi in each of the core areas have been commendable. 72000 community works at an estimated cost of Rs.l000 crores have been grounded, of which 31000 works valued at Rs.320 crores have been completed. 6.31 lakh children have been additionally enrolled in schools during the 1997-98 academic year. About 8.11 lakh children were immunized, 9.44 lakh eligible couples were motivated to adopt family planning methods and 24.71 lakh patients have been treated in 91000 special health camps organised during the Janmabhoomi rounds. 47600 free veterinary camps have been organised covering 97.30 lakh animals. As part of the 'Clean Village' and 'Clean Ward' concept, sanitation has improved significantly. 2.30 lakh individual sanitary latrines have been taken up. A big thrust was also given to afforestation with the planting of 320 lakh trees. Almost 80 per cent of the grievances of the people expressed in the gram sabhas and not having financial implications have been redressed. In addition, in each of the Janmabhoomi rounds special campaigns were launched to sensitize the people to shared goals such as conservation of energy and mobilization of small savings.

15. From our Governmen's perspective, Janmabhoomi is not just another government programme. It is a definition of our world view that enduring progress can be achieved only through hard work, discipline and dedication. Promoting this new ethos is the quintessence of Janmabhoomi.

Vision 2020

16. Government have decided to bring out a development strategy document for the State to be called AP VISION 2020 articulating the development goals to be achieved by the State by the year 2020. VISION 2020 is intended to inspire the entire population of the State towards shared goals and aspirations. Taking into account the megatrends both nationally and internationally, the document will define the goals in certain important variables governing economic development, human resource development and quality of life to be achieved by the year 2020. The umbrella VISION 2020 document will be backed up by a strategy paper that will clearly define the strategy for operationalising the goals contained in VISION 2020 and for translating the macro objectives into micro level interventions. It will also clearly specify the milestones to be achieved in each sector by each quarter. The strategy paper will ensure that there is consistency in goals and strategy across sectors and over time. VISION 2020 will harmonize international experience and best practice methods with the local situation and context reflecting the dictum 'think globally and act locally'.

17. The VISION document is being compiled with the help of an internationally reputed consultancy firm and is expected to be finalized in a monthÕs time.

Seasonal Conditions

18. The south-west monsoon was very weak during 1997-98. Rainfall was not only insufficient but also erratic in its distribution. The deficit during the kharif season of June-September ranged from 35 per cent to as high as 67 per cent in all the three regions of the state. The scanty rainfall compounded by long dry spells resulted in severe drought conditions across the State. Kharif crops like jowar, bajra, greengram, blackgram and redgram had failed. Groundnut yield had gone down drastically in the Rayalaseema region. There was 24.5 per cent reduction in area sown under various crops during the kharif season and 23 per cent reduction in the rabi season.

19. Reflecting this situation, out of the 1107 Mandals in the State, 867 Mandals were declared as drought affected and the following relief operations were launched:

(i) Government had released Rs.26.10 crore for rural water supply and Rs.15.92 crore to municipalities to mitigate the problem of drinking water.

(ii) An amount of Rs.1 crore was released to provide additional medicare to children, pregnant and lactating mothers and the old and infirm.

(iii) Agriculture Department was released Rs.62.66 crores to provide relief to farmers, besides extending seed subsidy and plant protection.

(iv) To save the standing crops, Government had released Rs.25 crores to APSEB to energize wells and strengthen the distribution system in Karimnagar, Nizamabad, Mehaboobnagar, Medak, Nalgonda and Ranga Reddy districts.

(v) Fodder scarcity was the unavoidable result of the reduction in agricultural operations. Government released Rs.5.60 crores for subsidized supply of fodder and fodder seed to small and marginal farmers and veterinary medicines and vaccines.

(vi) The worst hit as a result of adverse seasonal conditions are the weak and infirm, who are least able to cope with it. To mitigate their hardship, Government had released Rs.9.00 crores to provide relief at the rate of Rs.75 per month to 3 lakh old and infirm people.

20. Our Government has been deeply disturbed and concerned over the tragedy of suicides by cotton farmers who had become victims of the money lender - pesticide dealer nexus. This nexus is a result of the vast gap of nearly 80 per cent in the supply of and demand for farm credit. We have impressed upon the Reserve Bank of India the urgent imperative of bridging this gap and expanding the credit availability to farmers.

21. To mitigate their hardship and provide immediate relief to farmers, our Government took the following measures:

(i) Seeds were supplied to drought affected farmers for raising alternate crops.

(ii) Relief was extended to farmers whose cotton and redgram crops were affected by pests.

(iii) Plant protection measures were launched on a war footing to save the standing crops.

(iv) Government intervened with the Banking sector for reschedulement of loans and sanction of fresh loans.

(v) The Cotton Corporation of India and Andhra Pradesh Marketing Federation launched a market intervention operation by offering a price above Rs.2100.

(vi) Large scale raids were conducted on pesticide dealers, distributors and manufacturers to prevent the sale of spurious pesticides.

(vii) Sanction of Rs.1.00 lakh exgratia, houses under Indira Awas Yojana, education facilities for children and sanction of old age pensions for the victim's families.

22. Besides the above immediate measures, our Government will work towards a long term strategy, whose main elements will be:

(i) Pursue with Government of India for the establishment of Commodity Boards on the lines of Tobacco Board for commercial crops like cotton, chillies and important fruit crops like mango.

(ii) Persuade Government of India to include commercial crops like cotton and chillies under the Crop Insurance Scheme.

(iii) Significant expansion of the organized credit facilities through the Banking and Cooperative sectors to protect farmers from the usurious informal credit markets.

(iv) A Pesticide Testing Laboratory is being established in Warangal District.

(v) A research station for cotton and chilies has also been set up in Warangal.

23. The Chief Minister, as everyone knows, was on a hectic poll campaign for the Lok Sabha elections. But at the same time he was busy with another campaign as well - a less visible but an equally hectic campaign with the Government of India and the Reserve Bank of India to provide relief to the cotton farmers of the State. In response, the Reserve Bank fielded a high level mission in a record time and agreed to provide the following relief measures:

(i) No recovery of either the principal or interest from the affected farmers for a period of two years.

(ii) Amounts deferred during these two years will be rescheduled over a total period of 7 years.

(iii) Banks would lend immediately for fresh crops to the affected farmers at the enhanced scales of finance as revised by the District Level Technical Committee.

(iv) Rate of interest will be reduced to 4 per cent for small and marginal farmers who are eligible under the DRI Scheme.

(v) There will be no compounding of interest in respect of rescheduled loans. Banks would also not levy any penal interest and waive the penal interest, if already charged.

24. We gather from authoritative sources that this is by far the most generous relief package offered by the Reserve Bank to any state.

Civil Supplies

25. The rice subsidy scheme continues to be our flagship anti-poverty programme. In order to reach out to all the poor families, we have raised the income norm for eligibility from Rs.6000 to Rs.11000 per annum. It is our endeavour to cover all eligible families as per this revised income norm. Along with the rice subsidy programme, our public distribution system is by far the largest and arguably the best run in the country, handling 24 lakh tonnes of rice, 1.2 lakh of tonnes of wheat, 3.53 lakh tonnes of sugar, 28000 tonnes of palmolein oil and 8.36 lakh K.Lts. of kerosene. We made a budget provision of Rs.712.80 crores for the rice subsidy scheme for next year.

26. HonÕble Members will recall that we shared with this House our concern regarding the use of poverty ratio as estimated by the Lakdawala Committee in determining the entitlement for foodgrains under the Centre's Targetted Public Distribution System (TPDS). In March last year, this House passed a unanimous resolution that the poverty ratio of Andhra Pradesh should be reestimated under the Lakdawala methodology by eliminating the price depressing effect of the Government sponsored food subsidy programme. Following on that, our Chief Minister had taken up the issue with the Prime Minister, the Union Finance Minister and the Deputy Chairman of the Planning Commission. In response to our very well argued and well presented case, the Planning Commission had raised the poverty ratio for the purpose of TPDS entitlement from 23.08 per cent to 25.68 per cent. We are, however, not in agreement with the methodology used by the Planning Commission in reestimating our poverty ratio. Our calculations reveal a poverty ratio of 29.48 per cent for the purpose of TPDS entitlement. We are continuing our efforts to persuade Government of India to harmonize their methodology with ours.

27. Hon'ble Members are aware that it is the Centre's fiscal and monetary policies that trigger inflation and that state governments have little control over the price level. Even so, we are sensitive to the hardship that people, especially the poorer segments, face as a consequence of inflation. In the face of the abnormal rise in the price of onions in recent months, our Government have taken steps to supply onions at controlled price through fair price shops. In order to check price rise, our Government has instructed District Collectors to monitor the prices of essential commodities on a continuous basis. We will take whatever corrective action is necessary depending on the feedback so received.


28. Notwithstanding the increasing share of the secondary and tertiary sectors in the process of growth, agriculture will remain important in our economy for providing food security to the growing population as also for providing employment to the growing labour force. Investment in irrigation, therefore, continues to be an urgent imperative.

29. Large quantity of water still remains to be tapped in Godavari and Vamsadhara rivers. There is also the compelling need to utilize the surplus waters of Krishna by the year 2000 AD. Our Government, therefore, attaches the highest priority to the completion of the ongoing irrigation projects and to securing clearance for the pending projects.

30. In all 32 major, 39 medium and 917 minor irrigation schemes have been taken up for expeditious execution with a view to achieve maximum irrigation while maintaining balanced development of the different regions in the State. Our aim is to achieve, in the next three years, new irrigation in an extent of 13.80 lakh acres and to bridge the gap ayacut of 4.5 lakh acres in the tail-end areas of the existing commands with an outlay of Rs.5300 crores. Towards this end, Government have already secured actual releases or commitments of additional financial assistance to the tune of Rs.3330 crores. Of this, Rs.1460 crores is from the World Bank under the AP III Irrigation Project and the AP Hazard Mitigation & Emergency Cyclone Recovery Project, Rs.550 crores from the Overseas Economic Cooperation Fund of Japan for the KC Canal Modernization, Rs.530 crores from NABARD under the Rural Infrastructure Development Fund, Rs.490 crores from Government of India under the Accelerated Irrigation Benefit Programme and Rs.300 crores through bond floatation by the AP State Water Resources Development Corporation.

31. In order to expedite clearances of the pending projects, our Government have decided to set up a separate organization headed by a Chief Engineer to exclusively deal with inter-State matters and to pursue clearance for the pending projects. In the case of priority projects in backward regions, which do not require concurrence of other states, the State Government is taking urgent steps to implement them under a phased programme.

32. One of the most progressive and pioneering initiatives under taken by our Government is the enactment of the Andhra Pradesh Farmers' Management of Irrigation Systems Act, 1997 which entrusts both the power and responsibility for deciding on the timing and regulation of water supply under each irrigation command to the farmers themselves. Elections have been conducted in all 10292 Water Users' Associations and the 179 Distributory Committees formed under the Act. To provide financial support to these organizations, our Government have sanctioned an amount of Rs.39.84 crores to the Water Users' Associations at the rate of Rs.50000 for each association where elections were unanimous and Rs.30000 each for other Water Users' Associations. Our Government plans to extend to these organizations increasing responsibility in the construction, management and operation of the irrigation schemes to enable farmers to optimize the benefit out of the investments already made in the irrigation sector.

33. The budget for 1998-99 provides Rs.1013.77 crores under plan for the irrigation sector which is 25 per cent higher than the allocation for the current year. Reflecting the importance of irrigation to our rural economy, our Government will enhance the above allocation by tapping the capital markets.

34. One of the maladies of our irrigation sector planning has been the spreading of resources too thinly on too many projects thereby eroding the efficiency of investment. A strategic initiative of our Government has been to complete the ongoing projects on a critical balancing concept. Many medium irrigation projects started over 20 years ago, including happily Vengalaraya Sagar and Andra reservoir in my district, will be commissioned over the next few months.

35. Additionally, I have provided Rs.112.61 crores for maintenance of irrigation projects.


36. Power is arguably the most critical component of our infrastructure development strategy, and the most significant determinant of our growth prospects. Naturally, therefore, the power sector receives our continuous attention.

37. Despite the low hydel generation this year due to reduced inflows into reservoirs, overall generation registered a growth of 13 per cent. The daily supply of energy touched an all time high of 126 MUs on 25.2.1998, which is an improvement of as much as 15 per cent over the best performance last year. APSEB met a record demand of 5538 MW on 23.2.1998. This year APSEB has improved on its already creditable record of high plant load factors (PLF). KTPS Stage-V, Unit-IX which came into commercial operation only on 1.10.1997 has already achieved a PLF of 92.86 per cent, while the Rayalaseema Thermal Power Station and the Vijayawada Thermal Power Station achieved PLF of 99.23 and 98.54 per cent respectively during February 1998. The overall PLF of all thermal power stations has improved from 77.34 per cent last year to 81.91 per cent during the current year, which the Hon'ble members will kindly note, is way above the all India average of 64.4 per cent.

38. Short gestation projects, with a total capacity of 1750 MWs, will start supplying power to APSEB soon. These projects are slated to go into generation within a period of 13 to 27 months. These, together with the thermal power stations at Ramagundam and Krishnapatnam and the 1000 MWs thermal power station of NTPC at Visakhapatnam, will take the generation capacity beyond the 10000 MW mark by 2003.

39. Capacity augmentation will become infructuous unless it is dovetailed with the necessary transmission and distribution network. On the transmission side, OECF of Japan has extended financial assistance for the transmission system of the Simhadri project at Vizag. The system for evacuation of power from the Srisailam Left Bank Power House is under active implementation.

40. Supply and consumption patterns are being monitored continuously to provide more efficient and higher quality service to consumers. An exclusive Energy Audit Cell has been established with the aim of enforcing accountability for the energy supplied and to identify areas of high commercial and technical losses. This will help us to initiate corrective action to plug leakages. The special drives launched from time to time to detect power pilferage and to remove illegal connections have yielded very positive results.

41. We will continue to pursue all options to increase the efficiency of the power sector so that the growth momentum of the economy can be accelerated.

Women And Children Welfare

42. Across the developing world, there is strong realization that the girl child should be the fulcrum of all development effort. Our strategy extends beyond protecting the girl child from the vagaries of child labour, neglect and abuse. We want to extend the quality and reach of girls' education so that future generations of women become members of our economy, polity and society with dignity, self assurance and self-esteem.

43. The Girl Child Protection Scheme launched in March 1996 was successfully implemented in all the districts covering 56211 girl child beneficiaries. The scheme has been considerably improved during the current year. During 1998-99, the outlay for the scheme will be Rs.25 crores.

44. In a pathbreaking initiative towards prevention of girl child labour, our Government established special residential education camps for working girl children in all the 23 districts with an outlay of Rs.1 crore. We plan to repeat the programme on a larger scale next year.

45. Continuing with the successful strategy of self help groups of women towards achieving their economic empowerment, 3300 IGA groups and 9707 women groups were formed and assisted under the World Bank assisted ICDS with an outlay of Rs.14.85 crores. We made special efforts to involve women in the construction of Anganwadi Centres and to upgrade their skills to the level of masons. Under the Centrally Sponsored ICDS programme, 209 blocks covering 19.11 lakh of children and women were extended health, nutrition and immunization services while the State Government provided for the Supplementary Nutrition Programme component with an outlay of Rs.44 crores.

46. We have also received President's assent to the Mahila Commission bill.

Development Of Women And Children In Rural Areas (DWACRA)

47. The DWACRA scheme has been a phenomenal success in our state not only by way of inculcating the saving habit, but in enhancing the economic status of rural women and giving a boost to their self esteem and confidence. About 2 million women are now part of the DWACRA movement and their combined savings add up to an impressive Rs.115 crores while the total corpus they operate is as large as Rs.230 crores.

48. The Government took an important step in the empowerment of minority women by forming a number of self help groups covering 13000 women through the Andhra Pradesh Women's Co-operative Finance Corporation Limited. Similar self-help groups will also be extended to urban areas.

49. Over the last six months, DWACRA members have participated in three Melas which have exposed them to new technologies and marketing skills. Encouraged by the positive response to these experiments, Government is planning to set up DWACRA bazars in every district as well as a separate Women's Fund to sustain the efforts of DWACRA groups. To give a quantum leap to the DWACRA movement, in addition to Central flows, the State Government proposes to allocate an amount of Rs.44 crores to DWACRA groups during the year 1998-99.

Welfare Of Handicapped

50. Our strategy for promoting the welfare of the handicapped is to mainstream their concerns and to help them attain their full human potential. In accordance with the provision of 'Persons with disabilities - Equal opportunities, protection of rights and full participation Act', the Secretary to Government, Women Development and Child Welfare Department has been appointed to act as Commissioner for persons with disabilities. It has been decided to conduct an urgent and comprehensive survey on population with disabilities which will form the basis for systematic rehabilitation efforts. As soon as the survey is over, we will launch a major scheme for the rehabilitation of the handicapped so that they both contribute to as well as benefit from economic growth. Meanwhile, we have increased the allocation for supply of prosthetic aids to the handicapped to Rs.35 lakhs.

51. As many as 170 posts in various cadres were filled up during the year through a special recruitment drive towards fully operationalizing the 3 per cent of vacancies reserved for the disabled.

52. A Junior College and Vocation Training Centre, exclusively for the hearing handicapped, the first of its kind in the state, will be set up at Bapatla shortly. We also propose to enhance the rates for the maintenance of Government Homes/Hostels.

Youth Welfare

53. The Chief Minister's Empowerment of Youth Programme (CMEY) which was started in 1996 has been strengthened with 6514 Youth Associations benefitting from the economic support schemes with a total outlay of Rs.93.12 crores. Urban areas have also been included in the programme effective this year.

54. To meet the growing demand from several youth groups, the Plan Budget outlay has been stepped up from Rs.76 crores this year to Rs.121 crores next year.

55. By all accounts, CMEY has been a tremendous success, bringing into its fold several unemployed youth by providing them gainful economic activity as well as training in skills. This quantum jump in allocation will provide financial assistance towards matching grant, economic activity, training etc., for 10000 Youth Groups with an outlay of Rs.100 crores. In addition, 750 Consumer Cooperatives at the Mandal level will be provided financial assistance of Rs.1.00 lakh each. Funds have been earmarked for extra-curricular activities for youth such as Sports stadia/Auditoria/Gymnasiums as well as propagation of cultural activities. Around 3000 Youth Associations will be identified for the purpose of receiving equipment under sports and cultural activities. Youth Awards will also be instituted for encouraging the spirit of competition and comraderie. The free travel facility will be continued during 1998-99.

Social Welfare

56. Our Government's social welfare strategy is to neutralize generations of disadvantage suffered by the scheduled castes and tribes and to bring them into the mainstream of society so that they contribute to as also benefit from growth and development. Micro level planning with focus on the felt needs of the scheduled castes has been the basis for increasing the budgetary allocations from year to year. Budget allocation increased from Rs.320.61 crores in 1996-97 to Rs.397.74 crores during 1997-98 and is programmed to go up to Rs. 428.79 crores in 1998-99. Since the main focus is on human resources development, as much as 70 per cent of the total budget is earmarked for educational development.

57. During the current year, a new programme Back to School was introduced with the objectives of: (i) weaning children away from labour and admitting them in schools; (ii) arresting the school drop out rate, which presently is 56.66 per cent among scheduled castes and 70.82 per cent among scheduled tribes children in primary classes; and (iii) increasing the literacy rate. The target group comprises children working as bonded labourers, children of bonded labourers, children of jogins and basavis and children engaged in unclean occupations. Reflecting the significantly higher drop out rate for girls, the Back to School Programme had an explicit bias in favour of girls. During the summer vacation of 1997, the Back to School programme covered a total number of 42014 children in 382 centres with an outlay of Rs.222.47 lakhs. We plan to expand the programme in the ensuing summer vacation covering one lakh working children Government also propose to introduce a new scheme for compulsory education of SC children in order to enhance their literacy rate to at least 75 per cent by the end of the Ninth Five Year Plan.

58. The SSC results in Social Welfare Hostels improved from 37 per cent in 1994 to 54 per cent in 1997. Results of Social Welfare Residential Schools are impressive at about 80 per cent. In the 1997 SSC exams, 24 schools got cent per cent result and 7 schools got all first classes.

59. Government have launched a drive to fill up the backlog vacancies of SCs and STs. So far 3683 backlog vacancies have been filled. 17 candidates in 1996 and 26 candidates in 1997 belonging to weaker sections were selected for IAS and other Central Services from the Andhra Pradesh Study Circle. This impressive result, the best for any Government funded study circle in the country, is a matter of deep satisfaction to us.

Tribal Welfare

60. The Plan budget provision for tribal welfare during 1997-98 is Rs.68 crores, of which Rs.28 crores is normal Plan and Rs.40 crores is under externally aided projects. This is being enhanced to Rs.71.69 crores in 1998-99.

61. The number of families to be covered under the Economic Assistance Programme under Special Central Assistance and IRDP will be stepped up from 1.5 lakh during the current year to 1.8 lakh families next year. A Mid-day-meal programme, covering 3.5 lakh students, with the objective of increasing enrollment and retention has been sanctioned. 12 Residential Schools are being upgraded into Residential Junior Colleges. 451 SGBT Posts have been created for the new Girijan Vidya Vikas Kendra schools. 60 hostels are being converted into Ashram Schools. It is also proposed to (i) upgrade all Ashram Upper Primary Schools into Ashram High Schools; (ii) open 77 new Ashram Schools; and (iii) open 3 new Residential Schools.

62. Tribal development plan for the current year envisages electrification of 240 tribal villages/hamlets and release of 10000 agriculture services besides providing drinking water to 310 habitations.

63. We released Rs.3 crores during the current year for the construction of important roads in agency areas. Under the Employment Assurance Scheme, it has been decided to take up works with 100 per cent finance by Government in scheduled areas and predominantly tribal tracts in non-scheduled areas.

64. In order to prevent malnutrition among the chenchus living in the Nallamala forest areas, grain banks are being opened to provide foodgrains at the rate of one quintal for each family to be given as loan by the VTDA to its members.

Backward Classes Welfare

65. Our Government's strategy for backward class welfare comprises expansion of economic opportunities as well as rendering distributive justice.

66. Like in other sectors, we want to make education the main instrument for backward class development. BC students with poor financial backing are being provided free boarding and lodging, text books, note books, uniform etc. Government are presently running 17 Residential Schools, 63 Ashram Schools for fishermen, 14 De-notified hostels, 22 Waddera Hostels and 1330 Backward classes Hostels for both boys and girls to promote education among BCs below the poverty line. During the current year, we provided Rs.8 crore towards maintenance and Rs.3 crore for the construction of BC Residential Schools besides providing Rs.36.56 crores towards post-matric scholarships to backward class students.

67. Study Circles for pre-examination coaching of backward class candidates for competitive examinations are already operational in Hyderabad, Warangal and Anantapur. Plans are afoot to open new study circles at Srikakulam, Mehaboobnagar, Kurnool and Visakhapatnam.

68. An Action Plan with funding from the National Backward Classes Finance Development Corporation of Rs.68.61 crore has been launched for the economic rehabilitation of 28000 backward class families in the cyclone affected areas.

69. Being predominantly small and marginal farmers, the dependence of backward classes on minor irrigation is much deeper compared to other categories. The 10000 irrigation borewell scheme is being implemented all over the State with an outlay of Rs.50 crores. Steps are under way to provide energisation for the wells taken up under this programme.

70. To help the landless poor backward classes, a 'Land Purchase Scheme' has been taken up on a pilot basis in Nizamabad District with an amount of Rs.2.40 crores to cover 2400 beneficiaries.

71. Three traditional music schools have been sanctioned at Anantpur, Tirupati and Ranga Reddy Districts to train the children of Nayee Brahmin in their traditional and cultural occupations.

72. A good beginning has been made to help the unemployed BC youth to take up self employment oriented schemes by providing an amount of Rs.2 crores for the CMEY programme at the rate of Rs.20000 per group as margin money.

Minority Welfare

73. Our Government is sensitive to the fact that minorities in general, and their women in particular, are trapped in the vicious circle of illiteracy, unemployment and economic backwardness. In pursuance of the comprehensive policy formulated by the Government to bring minorities, especially their women, into the mainstream of society, several steps have been taken towards education and economic and cultural development of minorities.

74. The annual budget of the Minorities Welfare Department was increased from the earlier level of Rs.4.81 crores to Rs.25 crores this year. Consequently, the outlay for the Andhra Pradesh State Minorities Finance Corporation was increased from Rs.2.50 crores to Rs.10 crores and for the departmentally implemented welfare schemes from Rs.2.31 crores to Rs.15 crores.

75. In addition to the continuing schemes of margin money loans, escort services to minority entrepreneurs, vocational skill-training to minority women, improving class room performance of Urdu students, pre-examination coaching, development of Wakf institutions etc, the following important measures have been implemented.

(i) An amount of Rs.2 crores released for construction of Urdu-Bhavans-cum-Community Centres.

(ii) Rs.2.5 crores released for the construction and repairs of Wakf institutions.

(iii) A scheme of grant in aid for providing financial assistance to the non-governmental organizations working for cultural development of minorities formulated.

(iv) Urdu Medium Residential Schools at Hyderabad, Nizamabad, Kurnool and Guntur were upgraded as Junior Colleges from the academic year 1997-98.

(v) Four new Residential Schools in the districts of Cuddapah, Medak, Ranga Reddy and Nalgonda were sanctioned during the current academic year.

(vi) 3 ITIs for minorities at Punganur, Bodhan and Cuddapah established.

(vii) 3 Rural Polytechnic Colleges in Kurnool, Vikarabad (Ranga Reddy) and Tenali (Guntur) sanctioned.

(viii) Orders issued for 3 per cent reservation to the minorities in the BC Hostels out of the 10 per cent quota earmarked for other communities.

(ix) 200 acres of land provided for the establishment of the Moulana Abul Kalam Azad National Urdu University at Hyderabad.

(x) More than 1000 Urdu teachers appointed.

(xi) 10 per cent of houses under the housing programme have been earmarked for minorities.

76. During 1998-99, the budget for Minorities Welfare is being enhanced to Rs.28.37 crores. While implementing all the ongoing schemes for the welfare of minorities, the Government propose to launch several new initiatives including assistance to voluntary organizations for conducting health camps, educational rehabilitations of minority destitute women, orphan and child labour etc.


77. International experience indicates unequivocally that education is central to growth, development and social change. Across the world, investments in education have yielded results in the short and long term, thereby contributing to a higher quality of life. Our emphasis on education, with a special bias towards the girl child, reflects the lessons of this experience. On the national scale, Andhra Pradesh is categorized as being educationally backward. It is our endeavour not only to bridge this gap but to surge ahead as an educationally advanced State. The most challenging task in education continues to be universalization of primary education with focus on access, retention and minimum levels of achievement. Our education strategy is geared to meeting this challenge head on.

78. During 1996-97, the District Primary Education Programme was launched in 5 districts with a plan outlay of Rs.240 crores spread over a period of 7 years. We will extend the programme to the remaining 18 districts with an outlay of over Rs.620 crores. Opening of new schools in all schoolless habitations, improving the quality of education, ensuring retention by reducing the teacher pupil ratio, provision of infrastructure facilities are among the thrust areas of this programme. The District Primary Education Programme, in fact, goes beyond education. It has successfully institutionalized community participation through the institution of Village Education Committees.

79. Now to our explicit bias in favour of the girl child in the matter of education. We have started a unique project for the promotion of girls' education in 19 low female literacy districts through the formation of 'Mothers Associations' at the village level. The'Mothers Associations' not only contribute to more efficient utilization of funds under the Tenth Finance Commission for infrastructural facilities but also help improve the enrolment of girl students. An amount of Rs.17.18 crores spread over 4 years has been provided for this purpose.

80. We have sanctioned 1112 new primary schools with an outlay of Rs.32.16 crores. Primary Schools have been strengthened with the creation of 10647 posts of headmasters. During 1998-99, Government proposes to appoint 39000 teachers. This will include 10000 newly created posts. The Government is providing books free of cost to primary school children. To reduce the drop out ratio, 4100 Andhra Pradesh Open School Study Centres have been sanctioned.

81. In opening new schools, we are according priority to scheduled caste and scheduled tribe habitations. To address the needs of minority groups, Urdu Study Centres have been opened. In addition 300 additional posts of Urdu teachers have been sanctioned exclusively for Urdu Medium Schools.

82. In tune with technological advancement, education on computers, is being undertaken through the CLASS project.

83. The whole State has been effectively brought under the Adult Education Programme through the Total Literacy Campaign - Post Literacy Campaign, Continuing Education Campaign and the mopping up programme for leftouts and dropouts. The programme is being mainly managed and sustained by the village communities.

Health And Medicare

84. The quantum and reach of the medical and health cover in our State is better than in many other states. This is hardly comforting as we still have many tasks ahead of us in this sector. We need to improve the medical infrastructure to cope with the increasing demands on the system and to extend comprehensive health cover to the entire population.

85. A massive project aimed at improving the accommodation, technical manpower and equipment in secondary hospitals is being implemented as the First Referral Health Systems Project. Under the project, additional facilities are being created in 150 Community Health Centres, Area Hospitals and District Hospitals at a cost of Rs.608 crores. Although the project is scheduled for completion by 2002, we are planning to complete it well ahead of time.

86. Realising the need for better upkeep of the hospitals, an amount of Rs.24.65 crores has been utilised in the last 2 years for carrying out repairs to buildings, equipment, and for procuring essential items like mattresses and bed-sheets.

87. With a view to improving and expanding medical education facilities, the Government have obtained the permission of the Medical Council of India for increasing 170 seats in 4 Medical Colleges, viz. Ranga Raya Medical College, Kakinada, Kurnool Medical College, Kurnool, Sri Venkateswara Medical College, Tirupati and Kakatiya Medical College, Warangal. Government have also sanctioned 605 additional posts at the level of Professors/Associate Professors and Assistant Professors to cater to the demands of medical education.

88. Government have decided to establish 5 new Medical Colleges and 5 new Dental Colleges with private initiative. The Medical Colleges are proposed to be established at Nizambad, Mehaboobnagar, Adilabad, Nellore and Eluru while the Dental colleges are proposed to be set up at Vizianagaram, Nalgonda, Tirupathi, Warangal and Ongole. A High Powered Committee consisting of a sitting Judge, the Director of NizamÕs Institute of Medical Sciences and the Vice Chancellor of the NTR University of Health Sciences, will examine the applications received and make suitable recommendations. It will be Government's endeavour to ensure that a Medical College along with a super specialty hospital is established in each district.

89. To provide competent medical cover to people below poverty line afflicted with serious illness, Government have created a corpus fund in the name of AP State Illness Assistance Fund. Government have contributed an amount of Rs.10 crores as the seed capital to this fund.

Family Welfare

90. Containing population growth to sustainable levels demands that family planning receive central focus in the State's health and welfare programmes. Family Planning has been brought to the core of the development agenda of the State through the Janmabhoomi programme. Our action plan in this regard is directed by two broad strategic thrusts. First, access to a wider and better range of family planning and reproductive health services needs to be increased. Second, reflecting the fact that variables which have a vital bearing on family welfare such as fertility rate, age at marriage, son preference, the status of the girl child, are shaped in communities, family planning needs to be shifted from being a family based campaign to a community based campaign.

91. The State Population Policy aims at interventions to achieve these strategic objectives. An amount of Rs.15 crores has been earmarked for schemes for introducing improved methods of sterilization, increasing access to temporary contraceptive methods, ensuring detection and treatment of reproductive tract infections and diseases, managing unwanted pregnancies and infertility, improving the quality of services and ensuring increased community participation. Family Planning services during the current year have been expanded through effective outreach programme and special camps and campaigns. Simultaneously, training programme have been initiated for improving methods of sterilizations and quality of care. We are implementing a centrally sponsored Reproductive and Child Health Project with an outlay of Rs.220 crores. The project aims at improving maternal health through reproductive health services and management of unwanted fertility as also reducing infant mortality and childhood morbidity.

92. Happily, our sustained campaign is bearing fruit. The State now records a crude birth rate of 22.7 per thousand population which is the third lowest in the country next only to the birth rates of Kerala and Tamil Nadu. As enunciated in the State Population Policy, it is our endeavour to attain a crude birth rate of 19 per thousand population by 2000 AD.

Rural Development

93. A major effort has been made by the Government for generating employment in rural areas by drawing on resources from various Centrally Sponsored Schemes with suitable matching assistance from the State. Allocation for the various employment generation programmes is being stepped up to Rs.446.77 crores next year. We will ensure that these allocations are suitably enhanced in case of further matching assistance from the Centre.

94. The economic condition of our artisans continues to be a cause for concern. One of our major anti-poverty initiatives next year will be a large programme, with an outlay of Rs.100 crores, for the economic development of artisans. The programme will comprise skill enhancement, training, supply of modern inputs and tool kits, marketing support and entrepreneurship development.

95. A major factor inhibiting land upgradation is soil erosion caused mainly by heavy rains and undulating topography. Government have been addressing this issue through the watershed development programme aimed at conserving soil and moisture. This will not only increase the productivity of land, but also create gainful employment in rural areas. Presently, 2090 watersheds each comprising a gross area of 500 hectares and with an outlay of Rs.20 lakhs each, are under implementation. In addition 1046 new watersheds have been identified and these will be developed with the participation and involvement of the stakeholders.

96. In order to educate our farmers on the benefits accruing from watersheds management, Government have initiated training programmes at various levels. The trainees are also being sent to successful watersheds within and outside our State.

97. It is our Government's endeavour to develop the entire waste land in the State over the next 10 years through comprehensive watershed development with the proactive involvement of the communities.

Backward Area Development

98. Towards development of backward and remote areas in the State, Government propose to augment education and health infrastructure in these areas apart from linking every habitation with the nearby arterial road and provision of drinking water. An amount of Rs.21 crores has been provided in the budget for 1998-99 for the development of backward areas in the State.

Rural Water Supply

99. It is the endeavour of the Government to cover every habitation with safe and adequate drinking water. This problem is being addressed on two fronts. First, the uncovered and partially covered habitations are receiving priority. Second, areas which are affected by brackish water and fluoride contamination are being tackled.

100. During the year 1997-98, an amount of Rs.159.28 crores is being spent to provide drinking water in 2897 uncovered and partially covered habitations. The allocation for 1998-99 is Rs.161.28 crores. We will, however, step up the allocation further by effecting savings in other schemes depending on the progress and performance under rural water supply.

101. There are 7548 flouride and 5138 brackish water affected habitations to be covered under the Sub-mission of control of Flourosis and Brackish water project. 58 projects have been sanctioned at a total cost of Rs.620.15 crores to cater to the needs of 61.24 lakhs of population spread over 4216 habitations. During 1997-98, 785 habitations are being covered under the Sub-mission projects at a cost of Rs.67.90 crores. During 1998-99, 1200 flouride/brackish affected habitations are proposed to be covered with an outlay of Rs.212 crores.

Urban Development

102. Improvement of water supply, widening and upgradation of existing roads, provision and improvement of the basic social services and economic support programmes for the urban poor are the major thrust areas in urban development.

103. Urban Water Supply Schemes have been taken up in 33 municipal towns at a cost of Rs.441 crores and are scheduled to be completed by July 1999.

104. The first Hyderabad Water Supply and Sanitation Project financed by the World Bank is nearing completion at a cost of Rs.350.36 crores. In addition to increasing the water supply by 135 million litres per day from the Manjira, this project has substantially strengthened the distribution and sewerage network. It is now proposed to take up the second Hyderabad Water Supply & Sanitation Project to further improve and exapnd water and sanitation facilities in the twin cities. The project agreement with the World Bank in this regard is expected to be concluded during 1998-99. The estimated cost of the project is Rs.2000 crores and it will be implemented over a period of 5 to 6 years.

105. As part of the continuing efforts at relieving traffic congestion and reducing air pollution in the twin cities, 16 flyovers, one parallel bridge on river Musi and one road overbridge costing Rs.160 crores have been planned.

106. Under the National River Conservation Plan for Godavari River, major schemes covering the towns of Rajahmundry, Ramagundam, Mancherial and Bhadrachalam at an estimated cost of Rs.34 crores are being executed.


107. Our Government is deeply conscious of the pivotal role of industrial development in the growth of the state economy. In order to achieve a 7 per cent GDP growth per annum which is the target of the Ninth Five Year Plan, the industrial sector needs to grow at 15 per cent. Our State has the potential to be the frontrunner in industrial development in the country and it is our endeavour to spare no effort in fully harnessing this potential.

108. Our strategy for industrial development comprises a two pronged approach. First, creating an investor friendly environment and second, effectively removing the bottlenecks in infrastructure availability. Government's efforts in creating an investor friendly interface have achieved a great measure of success as evidenced by a survey published in BUSINESS TODAY of December 1997. The survey shows that Andhra Pradesh, which at 22nd rank was almost at the bottom of the list in terms of perception as a destination for investment two years ago, has now made a quantum leap to 5th rank. Also heartening is the assessment by the internationally reputed firm, Goldman Sachs, which rated Andhra Pradesh, along with Gujarat, as the state in the forefront of the economic reforms movement in the country. These changes in perception at the national and international levels are a reflection of the concerted effort by our government to attract investment which will not only provide employment but also bring in contemporary technologies and management practices.

109. Towards addressing the problems of infrastructure bottlenecks, our Government has decided to create a few centres of excellence in all the three regions of the State where international quality infrastructure would be provided to attract large investment. The software technology park at Hyderabad is a vital first step in this direction. Companies setting up their units in this PARK will be provided high quality, uninterrupted power supply, state of the art communication facilities and other infrastructure on par with the best available anywhere in the world. Hyderabad is well on its way to making a firm and decisive imprint on the software industry map of the country.

110. To further accelerate the growth momentum of software industry, our Government has also taken the initiative to set up the 'Indian Institute of Information Technology' with active participation of major national and international IT companies such as IBM, Microsoft, Wipro etc. It is our earnest intention to make IIIT a centre of excellence in developing the best grade human resources for the IT industry.

111. We are proud of our achievement on the industrial front; but we are not complacent. We are aware of the need to further streamline our systems, rules and procedures. We also need to simplify the plethora of laws regulating the small scale industry. Towards this end, the Government has set up a One Man Commission to examine the current status of laws, rules and procedures and to suggest changes, including a comprehensive legislation, to deal with issues involving small scale industry.

112. A number of variables enter into the decision calculus of potential entrepreneurs in determining their investment location. One such variable is the quality of labour force. On this issue, Andhra Pradesh has a decisive comparative advantage as we have a labour force that is reputed for its discipline, organizational loyalty and above all its high productivity levels. We want to build on this strong base to further enhance the skill endowment and productivity levels of our labour force, reflecting the fact that it is productivity levels that determine the long term competitive advantage among states.

113. We have disbursed Rs.50 crores towards industrial subsidy during the current year.


114. Sericulture is both income generating and employment intensive. The Government have been making all efforts to provide infrastructure support to this sector. Market Development Assistance, Thrift fund cum savings and security scheme, workshed cum housing, interest subsidy through Cooperative Central Bank, crop insurance for bivoltine rearers, procurement of mulberry and tasar cocoons and seed production are some of the important schemes under implementation for encouraging Sericulture. A major boost is being given to improve silk worm hybrid races by the newly established AP State Sericulture Research and Development Institute near Hindupur. A new project for the development of silk worm which is suited to different climatic zones is on the anvil.


115. The Sugar industry in the State set an all time record of 10.21 per cent recovery during the 1996-97 production season. Letters of Intent have been issued recently for setting up 5 new sugar factories in the State. Sugar factories in the cooperative and government sectors are passing through a difficult time. We have initiated a revamp plan. In the light of the recommendations of the Expert Committee, all the Cooperative Sugar Factories have been classified, into A, B, C categories on the basis of their viability. The A & B category units will be revamped under the banner of the AP Mutually Aided Cooperative Societies Act, 1995 which will vest the control and management of the factories with the societies and farmers. Units in the C category will be privatized.


116. The Government has been giving considerable importance to the development of Handloom Industry by conducting exhibitions for promoting marketing and supply of yarn to weavers through the yarn linkage scheme. We have also evolved a new project, with assistance from NABARD, to assist weavers outside the cooperative fold. Nearly 1800 weavers have been assisted under this programme for taking up individual schemes.

Public Enterprises

117. The return to the Government from its investment in public enterprises is marginal. On the other hand, Government is being called upon to provide budgetary support to maintain several of these enterprises. Reflecting the fact that the rationale and objectives that informed the establishment of many of these enterprises are no longer valid today, and keeping in view our transition to a market based economy, Government is giving serious thought to the restructuring of our public enterprises. The recommendations of the Working Group set up to study those enterprises are now being examined by a Cabinet sub-committee. I want to assure the House that in our approach to public enterprise restructuring we will be judicious and cautious in striking a balance between the interests of the employees and workers on the one hand and the development needs of the society at large on the other.

Roads And Ports

118. Infrastructure - both its quality and quantum - is a very critical determinant of investment location in the liberalized regime. Reflecting this new reality, our Government attaches high priority to development of roads and ports. Given the dimensions of the task, we are augmenting public resources with funds from both domestic capital markets and external aid. The newly established Road Development Corporation has raised over Rs.400 crores from the capital markets. These funds will be used for the improvement of 5400 km of road network transferred to the Corporation. An agreement has been concluded with the World Bank under the AP State Highways project with an outlay of about Rs.1850 crores to take up major improvement to 1400 km of road network and for the maintenance of 2000 km of state highways and major district roads. From the Rural Infrastructure Development Fund of NABARD we have tapped Rs. 157 crores for the R & B roads and Rs.125 crores for roads and bridges of the Panchayat Raj system. With funds already pledged and yet to be secured, we intend to take the investment in the roads sector to about Rs.1200 crores.

119. A quantum expansion in investment of this order also warrants changes in the delivery system. We have constituted a Core Management Group to identify the new challenges and formulate strategies for meeting them. The main thrust of this initiative will be to bring in the necessary institutional changes that will harmonize private initiative in what has traditionally been a public good like roads.

120. A weak link in our road system is technology and management. We need to harmonize contemporary technologies with our economic conditions and needs. We also need to expose our engineers, contractors and workforce to emerging technology and management practices. To meet these challenges, we have taken the initiative to establish an Institute for Construction Technology, under private initiative which will run training courses for technology and management upgradation and skill enhancement.

121. Fresh investment, no matter how large, can be rendered infructuous unless we pay equal attention to maintenance of the assets already built. We have, therefore, provided Rs.362 crores for the maintenance of R & B roads, which will be in addition to Rs.300 crores for Rural Road maintenance of the Panchayat Raj system. We will also constitute a State Road Fund for maintenance of roads in high quality as also to encourage private initiative in the development and maintenance of roads.

122. On the ports front, honourable members are aware of the initiative earlier taken to develop Krishnapatnam Port in the private sector. Our plans for next year envisage involving the private sector in the management of the Kakinada Port and development of Vadarevu and Gangavaram ports.

123. We will pursue efforts to have Hyderabad declared as an international airport. Direct flights to and from Singapore and expected to be operational in 1998. We will pursue action for construction of new international airports in the private sector at Hyderabad and Visakhapatnam as also for strengthening the existing airports at Vijayawada and Tirupati.

Forest And Environment

124. Under the Joint Forest Management Programme, 3500 forest fringe villages have been formed into Vana Samrakshana Samithis (VSS) for protecting and developing forest lands. Under the Andhra Pradesh Forestry Project, 230 Eco-Development Committees have been formed to conserve bio-diversity and to improve wildlife through eco-development schemes. The Zoo and Wildlife Safari Park at Tirupati will be expanded and improved.

125. A Memorandum of Understanding (MOU) has been signed with the Foundation for Revitalization of Local Health Traditions, Bangalore to conserve medicinal plants and to raise medicinal plantations. A scheme with an outlay of Rs.5.60 crores has been submitted to the Government of India to set up a botanical garden at Hyderabad.

126. The AP Forest Development Corporation (APFDC) is maintaining coffee plantations over 4000 hectares, which yielded 1500 tonnes of clean coffee during 1997-98 valued at Rs.20 crores. On behalf of the Government, APFDC has been implementing the scheme of collection of beedi leaf. Apart from providing employment to the rural poor, the scheme will yield net revenue to Government to the tune of Rs.25 crores during 1998-99.

127. The Hyderabad Waste Management Project, with external assistance from Australia, will address the problems of treatment, storage and disposal of the hazardous waste generated in various industries located in Medak, Hyderabad and Ranga Reddy districts. The environmental impact assessment is currently under process.

128. Major hospitals and medical institutions are being persuaded to have a common facility for incineration and for safe disposal of bio-medical wastes from their institutions.

129. The Hussain Sagar Lake has been selected under the National Lake Conservation Plan and a project report in this regard has been submitted to Government of India for external assistance. In an initiative towards promoting transparency, the Pollution Control Board is involving Non-Governmental Organizations (NGOs) in public hearings for environmental clearances of projects.


130. Tourism has much greater development impact than is commonly realized. It is employment intensive and has a large multiplier effect, especially in improving the livelihood of people in tourist circuits. Reflecting this potential, we have decided to give a quantum boost to tourism development and have decided accordingly to raise the plan investment in the tourism sector from Rs.1.20 crores during the current year to as much as Rs.45 crores next year.

131. To develop our tourist potential professionally and efficiently, we have retained an internationally reputed firm Ms.EDAW of UK to prepare master plans for Tirupati, Hyderabad and their surroundings. A similar exercise will be conducted for Visakhapatnam, Nagarjuna Sagar and their surroundings. Operationalization of these Master Plans both through government and private initiatives will be the major thrust of our activity next year. This will involve development of infrastructure and improvement of lodge, board and leisure facilities.

132. To harness the vast tourism potential existing in other districts not covered under Special Tourism Areas (STAs), district level committees headed by the Collectors have been constituted for the promotion of tourism. These Committees will identify infrastructural gaps such as improvements to roads, provision of drinking water facilities etc. of each tourist spot and prepare plans for their development. Such plans will be implemented by utilising the resources available within the districts under the ongoing schemes and will be supplemented, wherever necessary, by providing the necessary allocation in the budget of the tourism department.

Weaker Section Housing

133. Our State continues to maintain its preeminent position in weaker section housing. We have so far built a record number of 28,58,520 houses under the rural and the urban schemes from 1979 onwards.

134. During 1997-98, 4 lakh houses have been taken up under the weaker section housing programme with a subsidy of Rs.201.85 crores. Under the Indira Awas Yojana 58,803 houses have been sanctioned with an outlay of Rs.100.68 crores during 1997-98. We have so far been able to complete 2,50,378 houses under the normal weaker section housing programme and 58257 houses under the Indira Awas Yojana. The Government will maintain the tempo of the housing programme during the year 1998-99.

135. 62169 house sites have been allotted during 1997-98.

Effective And Responsive Administration

136. Designing schemes and providing resources for them is necessary, but not sufficient to attain growth and development. The sufficiency condition has to be met by competent, efficient and committed delivery systems. Over the last year, therefore, we have focussed attention on delivering a clean, credible, transparent, responsive administration. Some of the major thrust areas have been redesigning the system of performance appraisal and combining that with a fair and transparent system of rewards and penalties, adoption and implementation of citizen's charter especially in cutting edge public services such as water, power, public health etc, subjecting the performance under each publicly funded scheme to social audit and large scale training of employees at all levels to increase their efficiency as well as sensitivity to public purpose.

137. Improving the citizen-government interface is a constant and continuing effort in our Government. Just to give you an illustration, under the permanent integrated community cum nativity certificate scheme, 5.76 lakh certificates have been issued so far.

138. The file disposal campaign, another innovative initiative, has evoked very positive public perception. During next year, we hope to intensify this initiative.

139. A Cabinet Sub Committee and 3 Official Committees have been set up to suggest reforms in administration with particular reference to decentralisation of the decision making process. Government is also examining the various recommendations of the Staff Review Committee relating to rationalization of staff structure and to evolve norms for various functionaries in administration.

140. In accordance with the agreement reached with the staff unions and associations, Government have also set up a Pay Revision Commission.

Information Technology

141. The most decisive characteristic of the twenty-first century will be the emergence of information as a resource and knowledge as the engine of growth. Our GovernmentÕs strategy is to be prepared in advance for managing the transition to a knowledge society and to exploit the immense advantages the emerging information technology offers for the growth and development of the State.

142. We view IT not as an end in itself but as a vehicle for delivering efficient, responsive and transparent governance. Information Technology will be fully integrated with the process of administrative reform. It will be leveraged to achieve the objective of SMART governance characterized by a government that is simple, moral, accountable, responsive and transparent.

143. Government has adopted a three pronged approach to the promotion and use of Information Technology. First, the focus will be on the development of a sound information infrastructure within the state. Towards this end a State Wide Area network is being established using fibre optic connectivity provided by the Department of Telecommunications. This network will support high speed video, voice and data communications across the state and will form the backbone for a Governmental intranet. The State Wide Area Network will become operational between the state and district headquarters later this year. Government has promoted the Hitec City project, which will provide state of the art infrastructure for IT companies intending to set up their operations in Hyderabad. I am happy to inform the honourable members that the Hitec City project is proceeding ahead of schedule.

144. The second prong of our strategy is to use Information Technology for more efficient delivery of services to citizens, especially at the cutting edge level. Towards this end, several flagship applications have been identified. One of the important applications being prioritized is the multi-purpose household survey application that will enable issue of caste, income, residence and nativity certificates to the public across the counter. Another pioneering use of information technology has been in the computerization of the registration process, on a pilot basis, in the offices of the Registrar, Hyderabad and Sub-Registrar, Banjara Hills with an outlay of Rs.25 lakhs. This has enabled us to compress the total time taken for registration to one hour. Computerization is now being extended to all the Registration offices in the State and will be completed by 15 August 1998.

145. Other important applications of IT relate to file tracking, public finance management, commercial taxes, crime information, public utility services and local bodies. A pilot project aimed at Ôone stop non stopÕ services is being initiated in Hyderabad. Under this project, a wide range of citizen services including public utilities billing and payment systems will be introduced using electronic networks. In order to expand the user friendly services to citizens, Government will also encourage setting up value added network services by the private sector.

146. While the first two prongs of the Government's IT strategy focus on citizen services, the third prong addresses the manpower needs of the state for high quality IT professionals. Towards this end, the Indian Institute of Information Technology has been set up by associating world leaders in the establishment of specialized schools. The Institute has already started its operations from January this year. Government is also keen to promote distance education using electronic networks. Concurrently, IT courses in universities are being revamped for bringing them in step with the latest technologies.

Law And Order

147. The prevalence of the rule of law may not earn encomiums for any government. But its absence can throw an economy out of gear. Maintenance of law and order is, therefore, fundamental to creating an environment conducive to growth and development. Our Government, therefore, attaches utmost importance to the maintenance of law and order, to upholding the rule of law and to protecting the weaker sections of society.

148. I am happy to place on record the fact that there has been total harmony among the various communities living in the State. Extremist movement and factional violence continued to disrupt normal life in certain areas of the State. Our Government proposes to combat extremist violence through deterrent action as also through concentrated efforts at economic development of areas affected by the extremist movement.

149. To safeguard the rights of the weaker sections, a separate cell has been established in the CID headed by an IG of Police and 14 Inspectors to deal exclusively with offences against SC and ST communities.

150. Speedy disposal of cases is one of the basic tenets of the rule of law. To reduce the backlog of cases that are piling up in the courts, Government have sanctioned Rs.65 lakhs and created 131 additional posts of Assistant Public Prosecutors so as to ensure that every Court has one APP/APPO. Simultaneously, we have initiated measures to fill up vacancies of 153 First Class Magistrate to hasten the trial of pending cases.

151. To attract better quality trainers, Government increased the emoluments of personnel opting to work in Police Training Colleges. We will be spending an additional amount of Rs.4 crores for improving the quality of training imparted to both men and officers which will, in due course, translate to a more effective and competent police force thereby contributing to better governance at the cutting edge level.

Accounts 1996-97

152. The final accounts for 1996-97 reveal a revenue deficit of Rs.3199.05 crores. After taking into account the transactions on capital as well as public accounts, the year closed with an overall deficit of Rs.41.96 crores.

Revised Estimate 1997-98

153. Transactions as per the revised estimate of 1997-98 indicate a revenue deficit of Rs.761.45 crores as against the budgeted revenue deficit of Rs.1181.45 crores. The overall transactions of the year are estimated to result in a net deficit of Rs.4.41 crores. After taking into account the opening minus balance of Rs.41.96 crores, the year end balance is estimated to be (-) Rs.46.37 crores.

Budget Estimate 1998-99

154. During the financial year 1998-99, we have programmed for an expenditure of Rs.14,945.22 crores under Non-Plan and Rs.4589.87 crores under State Plan. This will result in a revenue deficit of Rs.589.19 crores. After taking into account the overall transactions of the year, we will have a net deficit of Rs.192.08 crores. With the opening balance of (-) Rs.46.37 crores, the financial year is expected to end with a negative balance of Rs.238.45 crores.

155. With these words, I now commend the budget to the august House for approval.